Fairly subdued trade in the first session of...>

JGBS: Fairly subdued trade in the first session of 2018 for JGB's, JGB futures

head into the close 4 ticks lower at 150.74 as Japanese equities soared - the

Nikkei 225 last up 741 points at 23,506 with volumes well above average. JGB's

softened early in the session to touch 150.72 going in to the lunch break, a

bounce early in the afternoon session was shortlived but the 150.72 level

managed to hold another test as markets went into the close.

- The BoJ purchases 1-10 Year JGB's in their first purchase of January, all

operation sizes were unchanged, results were broadly in line with the previous

operations.

- Japanese data wa largely ignored, Nikkei Dec Final Japan Manufacturing PMI

54.0 (Flash 54.2, Prev Final 53.6), this final reading denotes the highest

headline reading since Feb 2014, output and new orders also hitting 4 year

highs. The market also showed little reaction to comments from BoJ Gov Kuroda

that will continue with easy mon pol.

- Yield curve bear steepened, 10-Year yield last up 0.6bp at 0.054%, swaps

underperformed yields in the long end, 20-Year -0.4bp at L-9.3bp.